McDonald’s is now having a long-awaited resurgence, market analysts expecting its sales to have increased significantly in the last quarter of 2015, and predicting that this upward trend will be continuing in 2016 as well.
The once hugely popular fast food chain has had a long period of dwindling profits and disappointing results, but now it appears it’s finally making a comeback.
Its last quarterly sales and earning results from 2015 are expected to become public on Monday, January 25, and specialists expect that the figures will be even better than the ones from the third quarter of the year.
At the time, company announced that sales had climbed by around 0.9% between July and September, the small increment being a welcome change after 2 years marked by increasingly more distressing results.
Now, Wall Street analysts anticipate that McDonald’s sales across the United States between October and December have climbed by approximately 2.1%. Moreover, they also believe that sales across the world have also experienced a surge, by around 3.2%.
Mark Kailnowski, restaurant industry analyst at Nomura, has come so far as to claim that sales throughout the nation have actually risen by about 4.1%, this being the best results obtained by McDonald’s in almost 4 years.
There are various speculations regarding the reasons behind the company’s unexpected revitalization. For instance, some credit McDonald’s newly appointed chief executive officer, Steve Easterbrook, with having precisely identified the restaurant chain’s main issues, such as its worn-out menu, which hadn’t been changed or revamped in years.
With an ever-expanding list of appealing burger places such as the Shake Shack, Umami Burger, Smashburger and Five Guys, offering customers more healthy and unique meal combinations, featuring premium ingredients, McDonald’s star appeared to be fading.
More and more diners were abandoning ship drawn by the chain’s long-established competitors, even newcomers leaving a significant dent in the company’s overall sales and profits.
That’s when Easterbrook introduced a slew of much-needed improvements, by relying on the company’s Innovation Center.
For instance, in a quest to replace McDonald’s stale and old-fashioned image with a more contemporary and vibrant one, he jumped on the burger personalization bandwagon, by launching Taste Crafted Burgers and Chicken.
The service, initially tested at franchises from Southern California, gives customers the possibility to opt for a particular type of roll (artisan, potato or sesame), meat (crispy or grilled chicken versus beef) and flavor (Buffalo bacon, Deluxe, Pico Guacamole or Maple Bacon Dijon).
Another strategy that paid off was adding the Premium Buttermilk Crispy Chicken Deluxe Sandwich on the menu back in August, in order to compete more effectively with KFC, Chick-Fil-A and other fast food chains specializing in fried chicken dishes.
Last but not least, McDonald’s has been offering an “all day breakfast” ever since October, apparently lending an ear to diners, who had long been beseeching executives to extend serving hours for breakfast items past 10:30 a.m.
That move also proved successful, at least when it came to generating more sales, traffic and publicity for the restaurant chain.
The only downside was that many franchises were grossly unprepared for this change, complaining that kitchens have become crammed after adding more grills, toasters and other breakfast equipment.
According to them, the entire cooking and serving process has also been disrupted, due to higher numbers of orders, but profits haven’t actually increased, given the high investments and the discounted prices offered to customers in order to garner their interest.
For instance, McDonald’s has recently dropped its Dollar Menu in favor of the McPick 2, offering diners the possibility to choose 2 food items (from a selection including fries, mozzarella sticks, McDouble and McChicken), for just $2.
It remains to be seen if price reductions and recent investments will indeed have a negative effect on profits.
At the moment, investors still remain confident that McDonald’s is on its way back to the top, especially since its share prices have soared by a quarter in 2015, and have remained steady for now, while the Dow Jones Industrial Average has been plummeting by around 8%.
Image Source: Flickr